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Tajikistan: Joint Country Partnership Strategy - 2010-2012

Statement by
Makoto Ojiro
Country Director, Tajikistan Resident Mission
Asian Development Bank

At the Donor Coordination Council

2 November 2009
Dushanbe, Tajikistan

Your Excellency Deputy Prime Minister Murodali Alimardon, members of the Parliament, Chairman Davlatali Saidov and other senior officials of the Government of Tajikistan, members of the diplomatic corps, donor community, civil society, ladies and gentlemen, I would like to thank you all, on behalf of the Donor Coordination Council, for your presence here today at the occasion of the signing of the Joint Country Partnership Strategy (JCPS): 2010-2012. It is our special honor to have His Excellency Deputy Prime Minister Murodali Alimardon as guest of honor for this important ceremony.

Two years ago, following the June 2007 meeting of the Tajikistan Development Forum in Dushanbe, a group of five development partners got together and resolved to enhance the efficiency and effectiveness of their economic assistance to Tajikistan. That group has since grown to as many as twelve agencies that are present here this morning: Aga Khan Foundation, Asian Development Bank, European Bank for Reconstruction and Development, European Commission, Germany, Organization for Security and Cooperation in Europe, Swedish International Development Cooperation Agency, Swiss Cooperation, UK Department for International Development, United Nations Agencies, United States Aid for International Development, and World Bank Group.

We, the JCPS partners, have since worked together on review of donor activities and plans in key sectors, aid coordination and effectiveness studies, and numerous consultations and sector assessment to discuss concepts, principles and desired outcomes. The result is this JCPS document and it has three main objectives:

First, to affirm JCPS partners' common commitment to support Tajikistan's development goals and strategy, as described in its National Development Strategy, and related Poverty Reduction Strategies;

Second, to outline JCPS partners' shared strategic vision and operational framework for more effective coordination and management of their resource flows to Tajikistan, including actions to: (i) improve their predictability; (ii) to reduce their transaction costs of dealing with multiple agencies; (iii) to promote programmatic approaches, i.e. coordinated, broad-based support for agreed sector policies and programs; and (iv) to strengthen mutual accountability; and

Third, to define the measures needed to achieve agreed development results, including the benchmarks by which our shared principles of aid effectiveness will be monitored.

The JCPS process itself has already led to significant changes in development partner behavior and to several new sector-specific initiatives. However, the signing of this JCPS document today is merely the end of a preparatory phase. The real challenge for both JCPS partners and the Government is immediately ahead of us, namely: (i) to carry out our activities in line with the shared principles of aid effectiveness designed to assure ownership, harmonization, alignment, concrete results and mutual accountability; and (ii) to complete the agreed time-bound actions during the next three years.

We, the JCPS partners believe that the most important actions are to: (i) improve the predictability and transparency of our support by timely notice of planned commitments and estimated disbursements; (ii) develop sector-wide approaches, where appropriate, based on sector strategies; and (iii) minimize transaction costs through increased use of joint missions, joint diagnostic reviews, and joint training activities. In addition, strengthening of DCC sector and thematic working groups with agreed mandates, membership and work programs linked to the upcoming PRS-3 will be crucial during the next three months. Finally, with new development partners, such as China, Iran, Kazakhstan, and Russia now playing a prominent role, especially in financing infrastructure, it will be important for them to contribute to enhancing aid coordination and effectiveness effort. The JCPS group is not an exclusive club of selected partners, it is, in fact, open to any agencies that are supporting the country's development. To this effect, I would like to call on these new and other partners to join hands with us to strengthen our effort to deliver aid programs more effectively.

You may recall that His Excellency President Emomali Rakhmon attended the United Nations General Assembly in New York in September and delivered a speech. He suggested in his speech among other things that donor community should replace numerous forums of discussions with practical support in helping the country in the middle of the economic crisis. The JCPS is intended to do exactly that, i.e., to translate the partnership strategy into specific actions of support. Implementation of assistance would require sufficient resources, and in this regard, the twelve JCPS partners are expected to provide around $700 million in the next three years.

Let me now turn to some of the achievements that were made in the last year or so, as well as the major challenges that remain to be addressed. Let's talk about the achievements first.

1. The Government's macroeconomic policy appears to be in order as supported by the International Monetary Fund's ongoing program. According to the Government sources, an external audit of the National Bank of Tajikistan will soon be carried out as part of this program;
2. The Government adopted the cotton debt resolution strategy in May and created six working groups to implement reforms in cotton, agricultural credit, land reform, water sector reform, and rural development;
3. The Government has improved the business environment as evidenced by the recently issued Doing Business Report where Tajikistan's ranking improved, although it is still significantly lower than its neighboring countries;
4. The output of grain production increased a lot, which is expected to exceed 1 million tons in 2009, thus reducing the country's wheat imports-thanks to farmers' increased freedom to sow their crop of choice.

On the other hand, several significant challenges remain to be tackled.

1. Poverty incidence remains high at 53% primarily due to reduced remittances from abroad and the loss of jobs at home, and hence, the need to increase social expenditures by at least 1.5% of GDP;
2. There is a need to secure energy by addressing the winter energy deficit, improving energy efficiency, and promoting energy export, i.e., summer surplus energy, in the regional market;
3. The banking system remains burdened with loan defaults that constrain banks' ability to provide new loans to the private sector;
4. There are much needed structural reforms to: (a) strengthen governance of the large state-owned enterprises; (b) improve public administration, management, and service delivery; (c) promote a more predictable and transparent legal and judicial system; (d) implement land reform; and (e) enhance the investment climate needed to promote private sector development.

I firmly believe that JCPS partners together with the Government will be able to tackle these challenges by implementing this Joint Country Partnership Strategy. We look forward to enhancing our cooperation with the Government of Tajikistan in order to improve the efficiency and effectiveness of delivering our economic assistance programs. Let us work together to achieve this common objective.

Thank you very much.